Upcoming Tax Amnesty Period for 2015

Arizona, Indiana, Maryland, Missouri, Oklahoma, and South Carolina have authorized upcoming tax amnesty periods that will begin in September 2015. Tax amnesty is a limited time opportunity for certain taxpayers to pay a defined amount of outstanding income, sales or other taxes in exchange for forgiveness of interest and penalties and waiver of criminal prosecution relating to a previous tax period or periods without a penalty or prosecution. Amnesty programs can potentially reduce state tax liabilities by a third or more.

Arizona’s amnesty program is from[1] September 1, 2015 through October 31, 2015 and applies to all taxes, e.g. sales tax, reemployment tax, corporate income tax, fuel tax, etc. covered by the Department of Revenue (except withholding and luxury taxes) that could have been assessed before 2014. The Arizona statute of limitations for assessment of additional tax is generally four years after a return is file, or six years in case of an understatement of more than 25%, or no limitation period if no return was filed.

Indiana’s tax amnesty program is expected to begin this fall. The amnesty is authorized for unpaid tax liabilities that were due before January 1, 2013. Amnesty is applicable to all of Indiana’s “listed taxes[2] including income tax, financial institutions tax, and gross retail and use tax. A taxpayer who was a participant in Indiana’s only other amnesty program (2005) is considered ineligible. The program abates interest, penalties, fees, releases liens and civil or criminal prosecution. Of special note: if an eligible liability is not paid during the amnesty period and is subsequently discovered by the Department, penalties are doubled.[3]

Maryland’s amnesty program[4] runs from September 1, 2015 through October 30, 2015 and applies to tax liabilities that were due as of December 31, 2014. Amnesty applies to income (corporate and personal), sales, use, withholding, admissions and amusement taxes. Maryland waives civil penalties, and 50% of interest for approved delinquent taxpayers. This tax amnesty is not open to taxpayers who participated in a Maryland tax amnesty program between 1999 and 2014.

Missouri’s amnesty program runs for 90 days from September 1, 2015 through November 30, 2015 for tax liabilities accrued as of December 31, 2014. The amnesty applies to income, sales and use, and corporate franchise taxes. Participation disqualifies taxpayers from participating in any future Missouri amnesty for the same type of tax. Missouri will revoke the penalty and interest waived for taxpayers failing to comply with Missouri tax law at any time during the eight years following the agreement.[5]

Oklahoma’s amnesty program[6] waives interest, penalties, and fines to taxpayers that pay delinquent taxes for tax periods ending before January 1, 2015. The program runs from September 14, 2015 to November 13, 2015. Eligible taxes are corporate income tax, bank “in lieu” taxes, individual income tax, withholding taxes, sales and use taxes, gas and diesel taxes, gross production and petroleum excise taxes, and mixed beverage taxes, but not franchise taxes.

South Carolina’s tax 2015 tax amnesty period has not yet been announced by the Department of Revenue. An amnesty period is authorized for taxpayers who voluntarily file delinquent returns and pay all taxes owed. If a taxpayer is granted amnesty, the Department will waive criminal investigation and prosecution for the amnesty period, and waive interest and penalties. Compromised liabilities eligible for amnesty include taxes administered by the Department of Revenue.[7]